... Introduction to Financial Statements and Other Financial Reporting Topics
46 Chapter 2 Introduction to Financial Statements and Other Financial Reporting Topics
When examining financial statements, ... Permanent and Temporary Accounts)
Introduction to Financial Statements and Other Financial Reporting Topics 43
Chapter 2 Introduction to Financial Statements...
... associated with
these expected returns.
Financial Analysis
Financial analysis is a tool of financial management. It consists of the
evaluation of the financial condition and operating performance of a
business ... long-term sources of
funds, and working capital management. Part Six covers financial state-
ment analysis which includes financial ratio analysis, earnings analysis,
and...
... expected return and
risk. And throughout your study of finance, you will be concerned with
1-IntroFinancial Page 4 Wednesday, April 30, 2003 11:48 AM
Introduction to Financial Management and Analysis ... between potential bene-
fits and potential costs. Risk is the degree of uncertainty associated with
these expected returns.
Financial Analysis
Financial analysis is a tool of fin...
...
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Dividend Valuation Model
amount
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Review of Economics and Statistics The Investment
Financing and Valuation of the Corporation
The Theory of Investment Value
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Value of a 4% Coupon Bond with Five Years to Maturity and
Semiannual Interest
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time path
Value of Olympic Po...
... offers some advantages and disadvantages.
The discounted flow techniques—NPV, PI, IRR, and MIRR—are supe-
rior to the nondiscounted cash flow techniques—the payback period
and the discounted payback ... terms of years and fractions of years. For example,
assuming we receive cash flows uniformly throughout the year, the pay-
back period for Investment A is 2 years and 6 months, and th...
... options,
and warrants are valuable and affect the riskiness and attractiveness of
the security they are attached to.
■ The bond indenture is the contract between the issuer and the bond-
holders and ... debt’s book value and the amount paid to retire the is-
sue is treated as an extraordinary gain or loss [Statement of Financial Accounting
Standards No. 4, Reporting Gains an...
... aware of this and demand a higher return on
debt (and hence a higher cost to the firm).
9
The result is that sharehold-
ers ultimately bear a higher cost of debt.
9
Michael Jensen and William H. ... having
enough cash to meet day-to-day operations and the costs of having cash
(e.g., opportunity cost of funds and costs of getting and storing cash). The
Baumol and Miller-Orr models...